8/26/2010 @ 2:00PM

Traditional Advertising: Why Companies Need It

Back when the first towns were so small that every resident and half the itinerant traders passing through were on a first-name basis, advertising a professional service meant little more than walking into the village pub and introducing yourself to the innkeeper. Chances are, you would have gotten to the next stage–in part because you were the only lawyer, accountant or land surveyor in town.

These days few potential buyers will even take a meeting unless you’ve found a way to tell them who you are before you walk in the door. Which means something has to open that door for you. Then and only then can your professionalism, empathy, experience and ability to demonstrate a clear value proposition come into play.

That’s why I’m a big believer in advertising. It remains a highly efficient way to say hello and offer a sense of ourselves to potential clients–on a scale we could never achieve in person.

In planning a brand strategy, I try to keep our partners’ and potential clients’ needs in equal view. In fact, I find it helpful to imagine a community of people out there who would value our firm’s capabilities and believe in our way of doing things. A village, so to speak, of future brand loyalists. Part of my job as a brand leader in a large professional services firm is to find these people and make sure they know who we are, what we do, and why they should care. Our partners, directors and business development professionals will do the rest, and they do it extremely well.

In my imaginary village, any competent professional is welcome to hang out a shingle and go to work. We aren’t the only game in town for assurance and business consulting. We have to convince the denizens of this village to trade with us.

How do we do that? Well, you know all the ways. And the most important thing is that people know you. Nobody does much business with people they don’t know. In recent years, social networking has gotten all the buzz, leaving some marketers and business leaders the impression that advertising has gone the way of the dinosaur–or at least of the quaint era portrayed on TV by Mad Men.

Yet even in this time of audience fragmentation, new media and the decline of the country’s daily print newspapers, advertising remains a cost-effective means of introducing ourselves and saying something to many clients and prospects all at once. The media of advertising may change, but its central role in brand strategy does not. First and foremost, it tells prospective clients we’re here, and keeps our name fresh in their minds. It can help drive a company’s growth, overall brand strength and resilience.

Advertising often defines the early communications of a startup, new service or product offering. It may precede or run simultaneously with word-of-mouth, press relations and social media strategies. And while few mass communication strategies can beat word of mouth for immediacy and authentic conversation, the paid advertising message is the foundation on which all that buzz is based.

Consider it a shout-out for the in-depth conversation to follow.

To illustrate, take the white-hot Old Spice campaign phenomenon: “The man your man could smell like,” featuring actor Isaiah Mustafa. Both mainstream and social media went wild over the Old Spice guy, giving the campaign a multiplying effect that far exceeded its purchased airtime. But before we chalk up all the success to social media, deconstruct the situation for a moment to see the critical role advertising played. First, there was a clever TV spot put together by agency Wieden + Kennedy that won a Grand Prix at Cannes and began to gain traction beyond the media placement. A second spot followed, and soon evolved into a mega-hit social media strategy that included 184 personalized video responses to fans’ tweets and comments, and millions of online views to complement the original media buy.

Compelling as the social media and PR strategies may have been in this campaign, I am reminded that the entire thing began with a single ad. The campaign also included more subtle forms of paid messaging, such as a well-timed investment in Twitter’s Promoted Trending Topic service. And paid advertising will also be key to maintaining the momentum of the social media buzz.

While 2009 saw a decline in U.S. ad spending that was directly attributable to the recession, nearly $57 billion was spent in the first six months of last year, according to Nielsen. Ad insight company Kantar Media tallied the final for 2009 U.S. expenditures at $125.3 billion. Given the retrenchment in all areas of the economy, that speaks to advertising’s ability to generate tangible business results.

When it comes to professional and financial services, advertising is a mainstay for building brands and communicating new service capabilities targeted to particular market segments. Both professional and financial services are high consideration categories, with a long sales close cycle. Making a clear connection between advertising and brand strength is difficult to establish and tracking sales to ad spend is nearly impossible.

Look, however, at the example of the besieged financial services sector; the value of paid communication is clear. Nielsen says that financial services represented about 17% of ad spending globally. Kantar reported the sector is spending slightly over 10% more in the U.S. than it did last year, a strong signal to the marketplace. Clearly financial services organizations have a goal to nurture their brands and have found advertising to be a potent medium for doing so. We also see a similar trend in the once advertising-averse legal sector: From 1991 to 2000 law firms increased ad spending sevenfold.

IBM is another great example within the B-to-B and consulting space ahead of this curve. Long known as one of the world’s leading technology companies, IBM’s challenge was to make its prospects understand that the company known for manufacturing “Big Blue” was also a major business consulting firm. IBM wanted to establish that it could leverage its role as a technology leader into one as a business problem-solver, and that it could do everything from strategy to planning to flawless execution.

Its advertising platform boiled down to a simple idea: “In a world of talk, IBM gets stuff done.” The company invested millions in advertising, and in 2008 IBM replaced Microsoft as the world’s second-most valuable brand. According to Interbrand, this was attributed to “IBM’s continued transformation from a PC vendor to a “solutions provider” for international businessesa transformation made possible only by advertising.

Smart companies, in other words, see the potential for a significant return on their advertising investment. And a big part of what they get is control over their brand messaging–control that can help launch, guide, encourage or even offset the broader conversation of tweets, texts, postings and sound-bites flying around the online universe and mainstream media.

For my money, advertising is the best way to be sure that when our partners want a meeting, they get one. In part because the village innkeeper can already vouch for them.

James F. Kelly is the U.S. brand leader for PricewaterhouseCoopers, spearheading the company’s branding efforts around advertising and external and internal communications.